Pension Maximization and Legacy Planning!

 YOU DEVOTED YOUR WORKING LIFE to do something meaningful and for all of your hard work you will receive a monthly income in the form of a pension.  That's the good news.  The bad news is that you may cost yourself HUNDREDS OF THOUSANDS of dollars by not becoming educated about how to TAKE control of those benefits.

Pension Maximization is a strategy and process by which a person who is or will become eligible for pension benefits can dramatically increase his or her retirement income!

Pension's are defined benefit plans that will give the recipient a specified income at the time of eligibility. Most pensions such as PERS, STERS etc. (e.g. public pensions) are based upon the HIGH 3 year income estimates of the employee.  Also, the years of service will be multiplied against a mod factor (FUN STUFF HUH?), and presto change-o, you get X number of dollars as a total pension income (we speak MATH so we can help you figure it out).

The problem becomes that if you are married and would like the pension to continue to come in to the family in the event of your early or premature death the income will STOP!

                That's right it is OVER!!!!!  Pretty harsh isn't it?

Well, as you can imagine, most spouses are going to ask, "Isn't there a way we can GUARANTEE that if the pension recipient dies first, the money keeps coming in?" (Assuming the Government keeps printing money)

The answer to that question is Yes! It’s called a MODIFIED pension, and it is the choice for most people given the choices presented.

Assuming you would have been eligible for a $4,000 monthly income after all of the calculations of years of service x income x mode... blah blah blah... your cost of insuring your spouse would continue to get the income after your death is only a reduction of approximately 15%.  That’s $600 per month or $7,200 per year, and don't forget the COST OF LIVING ADJUSTMENTS  (COLA, not to be confused with the beverage).

This could represent a loss of income, assuming you both make it 20 years into retirement, of $144,000 plus cost of living adjustment.  If you're a couple who both will earn a pension of similar stats then multiply by 2--OUCH! 

And to top it off there is NO refund of the surviving spouse’s premiums when the other pension holder dies. THAT'S RIGHT THE MONEY JUST VANISHES!

OH yeah, and if you DIE before you retire, the income gets chopped down to an incredibly low number as well, and you guessed it, the COLA will be tied to that LOW, LOW amount as well.

                Welcome to the world of PENSION PLANNING!

CHEER UP.  We have strategies that not only will allow you to design a plan to take the maximum allowable pension at retirement, it may provide a TAX-free lump sum payout in the event you die before you intended.  Also, unlike the PERS-style pension, if both husband and wife pass away, the proceeds will go to the BENEFICIARY of your choosing--family, friends, charity--pretty much anyone you choose!

If you, a family member, or friend, is drawing a pension or will be eligible to draw a pension, PLEASE CALL us and discus how you can protect what you've worked so hard to build.  It is really never too early to begin the PENSION MAXIMIZATION PLAN!